One of our new survey participants received feedback from its distributors (through one of our surveys) that they don’t provide adequate mechanisms for distributors to provide input. I suggested that he put a Distributor Advisory Council (DAC) in place. A manufacturer’s DAC is small group of distributors that serves three purposes:
- Provides feedback to the manufacturer about the sentiments of all distributors
- Communicates messages from the manufacturer to distributors not on the DAC.
- Provides market insights to the manufacturer given its closer proximity to the marketplace.
When I brought up the idea of instituting a Distributor Advisory Council (DAC) to the president of the manufacturer, he responded that he liked the idea in concept, but felt that his small company couldn’t afford one. It’s actually not the first time I’ve heard this… many leaders in small industrial companies came from larger companies and saw first-hand how those companies spend on their DACs. But an effective DAC doesn’t require get-aways to exotic locales with golf and lavish dinners… it just needs to be mutually beneficial. Actually, there are three ingredients for an effective DAC for an industrial manufacturer:
- Six to ten interested distributor participants who can represent both their companies and the different segments of distributors they represent
- Assignments of how each participant will represent specific non-participants
- A clear charter for what the DAC’s role is. Examples could include:
- Input on product lifecycle
- Feedback on marketing communications
- Representing concerns of non-member participants to the manufacturer\
- Succession plan for participants (i.e., how long the term is)
- An effective operating model that respects participants’ time commitments. For example, established meetings (maybe over web/phone) and associated agendas
- Some display of thanks to participants for giving their time (e.g., dinners, free product)
A DAC can be implemented in a variety of ways. Some very successful DACs have been implemented by asking for less than a day’s worth of each participant’s time over a year and no travel. The key is to design it well up-front.